Every business venture, whether big or small, would have the idea or notion of profit foremost in their mind. Profit is the only way you can go forward, sustain, achieve growth and development. But, sometimes financial losses are inevitable and may occur regardless of the fact whether your business is big or small. But no matter how big or how small you are, and no matter what your losses are, you should do something to avoid those negative results in your operations and switch to profit. Hence, you have to generate income and make profits to avoid and get rid of losses; and for this to happen you should know how to play with your nominal accounts – income and expenses.
Here are some tips which can help you avoid losses and turn your venture to profit.
1) Increasing your income or revenues:
The first step towards profitability is to examine the price of your product. Set the right price – a lower price will attract customers while a substantially lower price will make you incur losses. A substantially higher price will also lead to losses, and so you will have to use your judgement in fixing the right price. The price of a product would include the cost of manufacture, operating expenses, and profit. Price is related to demand and when there is a high demand for your product, you can increase your price keeping in view your competitors’ prices.
2) Producing the right quality:
You need to produce the right quantity of products to attract more customers and increase sales. You can ensure customer satisfaction by selling goods at a lower price. But you should remember that your goods should be of consistent high quality or else you will lose your reputation and your customers. Customers may buy your low quality goods the first time, but they cannot be cheated the second time and you will end up losing both your name and customers. You should also be aware of the ill-effects of the word-of-mouth effect by your customers to others of the inferior quality of your goods. The information that will spread to the entire market of the bad quality of your products will make your sales go plummeting. And, to build your reputation again will take a lot of time, money, and effort.
3)Producing the right quantity:
Producing the right quantity of goods is as important as producing the right quality of goods. Production of the right volume of goods – no more, no less – will allow you to achieve a profit. You should be able to produce the right volume of goods that would be commensurate to the demand. A greater demand would require you to produce more while a lesser demand will require you to curtail production.
4) Promote and Advertise:
Promoting and advertising your products is very essential for sale of your products. Your customers should know about your product and therefore you should spread word about it through the media – newspapers, magazines, cinema, TV, and internet. Word about its quality can also spread by word-of-mouth and this is one of the important sources of publicity. You can also do online promotion using the social media – blogging on WordPress, video sharing on Youtube, live-streaming on Twitter and social networks like Facebook without spending any money.
One of the most important areas for any business is customer care or customer service. Any business which desires to have a steady and consistent income should be able to offer excellent customer service to make its customers happy. That is the trick of a really good and shrewd businessman. A satisfied customer will not only assure you of a steady business and consistent income but you can rest assured that he will garner more business by telling others.
The article speaks of the profit motive that every business venture, whether big or small, would have foremost in their mind. Profit is the only way you can go forward, sustain, achieve growth and development. But, sometimes financial losses are inevitable and can occur in any business whether big or small. Every business has to generate income and make profits to avoid and get rid of losses; and for this to happen they should know how to manage their nominal accounts – income and expenses.